Top-Down Approach

1. Approach used when selecting controls to test in an integrated audit in which the auditor evaluates overall risks at the financial statement level, considers controls at the entity level, and then focuses on accounts, disclosures, and assertions for which there is a reasonable possibility of material misstatement. An approach to auditing internal controls whereby specific risk factors are identified to determine the scope and evidence required in the assessment of internal control. (Also called risk-based approach.)